TOPIC 4 Student loans

professor penny

Most student loans — about 92%, according to a June 2020 report by MeasureOne, an academic data firm — are owned by the U.S. Department of Education.

Learning goals

By the end of this topic, you should be able to:

Describe the key features of student loans

SECTION OUTLINE

Topic 4 Student Loans

Content Videos

The Gus A. Stavros Center for the Advancement of Free Enterprise and Economic Education at Florida State University is pleased to offer these resources. They were created by Teaching Professor Joe Calhoun.

The captions were created by a computer program so sometimes they may be inaccurate or contain spelling or grammatical errors.

You may alternate the views by clicking on the white icon on the top-right corner of the screen.

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key point

Your student loan should finance tuition, fees, books, and other expenses directly related to being in college, not lifestyle and living expenses.

Certified peer mentors

Mentors give presentations to groups about our topics. They also assist other students in personal finance matters and answer questions during individual meetings. To schedule a presentation or an appointment to discuss your situation email coss-financialpeermentor@fsu.edu or visit the Stavros Center financial wellness page.

a topical story

Jamal and Isabella had just finished outreach on Landis Green for their campus organization and Jamal was meeting Diego for football on the green. He helped Isabella pack everything into her car and as they headed back to Landis, met up with Diego and found Madison studying nearby.

“Hey Diego, Madison, what are you working on?” Jamal asked.

“Ugh, working on this stupid plan for my student loans. But yay adulting, right?” she said with a smile. They had always wished they could be adults, out in the real world with real responsibilities, but now it wasn’t feeling like it was any better than roaming around on the playground, carefree.

“Yeah Madison honestly, it’s all so confusing, I was working on my scholarship and loan applications yesterday and it’s all really overwhelming. I’m gonna be in debt for so long,” Diego said.

“You know, you don’t need loans. And just because you’re offered them, doesn’t mean you have to accept. Just ask your parents to pay for college for you or get scholarships and a job or something.” Isabella suggested.

“You know Isabella, it’s not always that easy. Sometimes student loans are just something you have to deal with,” said Jamal.

“Yeah I mean, as long as you have a plan to handle them and make sure you’re saving so that you can pay them off as soon as you can after you graduate, it’s okay if you need a little extra help. Just don’t use them to go to the movies or eat out,” Madison said, laughing. “I have loans, but I have a job and I am saving what I can. Plus, I’m working hard on my resume and internships so that I can have a good paying job when I graduate. It’s all about having a plan.” Madison said, confidently. “But we’ll see if this whole art thing makes that possible.”

“That’s true, I guess I didn’t realize. I just always thought loans were bad,” Isabella said.

Diego left the girls’ conversation to go throw with Jamal. “Thanks for the advice, Madison,” he yelled as he made his way to Jamal where he was hanging out with his friends from cross country.

Madison turned back to Isabella. “They aren’t ‘bad’ or ‘good.’ Sometimes it’s just a fact of life. You just can’t be clueless and irresponsible like you know who,” she said as they both laughed and gestured towards Ethan as he walked up to their blanket.

“Hey now I can hear you,” he said as he sat down on the blanket with his friends.

(Story created by Jasmine George, Ana Siqueira, Courtney Swanson and Alex Thompson)

related books

These books have a chapter directly related to this topic. Please read them for more details.

Chapter 10: Ramsey, Dave. Dave Ramsey's Complete Guide To Money. Ramsey Press, 2012.

Principles 91 & 92: Siegel, Cary. Why Didn't They Teach Me This in School?: 99 Personal Money Management Principles to Live By. CreateSpace Publishing, 2013.

Chapters 1 & 5: Orman, Suze. The Road to Wealth. Penguin Publishing Group, 2010.

Chapter 10: Ramsey, Dave. The Total Money Makeover. Nelson, Thomas, Inc. 2013.

Chapter 9: Lowry, Erin. Broke Millennial: Stop Scraping By And Get Your Financial Life Together. Penguin Publishing Group, 2017.

additional resources

https://www.consumer.ftc.gov/articles/1028-student-loans

https://www.thebalance.com/direct-loans-what-to-know-about-federal-student-loans-4770462

https://www.igrad.com/videos/smart-borrowing

https://studentaid.gov/loan-simulator/

https://www.thepennyhoarder.com/debt/beginners-guide-to-student-loan-debt/

https://www.myfloridacfo.com/YMM/Calculators/CollegeLoan.aspx

https://www.accesslex.org/lex-talk-money/is-now-the-time-to-refinance-your-student-loans

https://www.annuity.org/financial-literacy/

other books

Malkiel, Burton. A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing. W. W. Norton & Company, 2020.

Wood, William. Getting a Grip on Your Money: A Plain & Simple Christian Guide to Managing Personal Finances, Eliminating Debt, Spending, Saving & Giving, Investing for the Future. Intervarsity Press, 2002.

Bach, David. Smart Women Finish Rich, Expanded and Updated. Currency, 2018.

Bogle, John. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns. Wiley, 2017.

Clason, George. The Richest man in Babylon. Dauphin Publications Inc., 2018.

Hill, Napoleon; Arthur R. Pell. Think and Grow Rich: The Landmark Bestseller Now Revised and Updated for the 21st Century. TarcherPerigee, 2005.

Lynch, Peter; John Rothchild. Beating the street. Simon & Schuster, 1994.

Kobliner, Beth. Get a Financial Life: Personal Finance in Your Twenties and Thirties. Simon & Schuster, 2017.

Orman, Suze. The 9 Steps to Financial Freedom: Practical and Spiritual Steps So You Can Stop Worrying. Currency, 2006.

Bach, David; John David Mann. The Latte Factor: Why You Don't Have to Be Rich to Live Rich. Atria Books, 2019.

Hogan, Chris. Everyday Millionaires: How Ordinary People Built Extraordinary Wealth―and How You Can Too. Ramsey Press, 2019.

important government sites

Economy:

Bureau of Economic Analysis reports GDP, Income, International Trade, and many others

Bureau of Labor Statistics reports Unemployment, Prices, Productivity, and many others

The U.S. Department of the Treasury's mission is to maintain a strong economy and create economic and job opportunities

The U.S. Small Business Administration (SBA) continues to help small business owners and entrepreneurs pursue the American dream

Banking:

The Federal Reserve System performs five functions to promote the effective operation of the U.S. economy

The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress to maintain stability and public confidence in the nation's financial system

The National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions

Federal Regulation:

The Internal Revenue Service is the nation's tax collection agency and administers the Internal Revenue Code enacted by Congress

The Federal Trade Commission protects consumers and competition by preventing anticompetitive, deceptive, and unfair business practices

The mission of the SEC is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation

The CFPB is committed to providing consumers with up-to-date information and resources to protect and manage their finances

Other:

Social Security Administration

Department of Education

State of Florida

ECO 3041

ECO 3041 Personal Finance is a 3 credit hour course offered in-person and online each fall and spring semester. The purpose of the course is to provide you with the specific content knowledge of personal finance and to give you opportunities to start using that knowledge to create good habits, make better financial choices, and live a more fulfilling life. It covers material for all 33 topics listed here. See Professor Calhoun's most recent syllabus here. ECO_3041_SP21.pdf

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To schedule a presentation or an appointment with a certified peer mentor to discuss your situation email coss-financialpeermentor@fsu.edu or visit the Stavros Center financial wellness page.